Housing inventory across King County, Washington remains tight, fueling bidding wars between buyers and resulting in longer commutes for some. That’s the latest assessment and outlook for the King County real estate market in 2017.
Earlier this month Sam Debord, president of Seattle King County Realtors, wrote a housing update for the financial information website MarketWatch. He explained that limited inventory and strong demand are the biggest trends driving King County’s real estate market forecast through 2017.
King County Real Estate Trends & Outlook for 2017
Here are some key points from Mr. Debord’s recent market update:
- Home prices in King County, Washington rose 12% in February 2017, compared to a year earlier. Believe it or not, that’s a bit of a slowdown compared to a year ago.
- In February, housing inventory in the Seattle area was a scant 1.1 months of supply. A balanced housing market is one that has about five to six months worth of supply. So conditions are very tight right now in the Seattle metro area. This is the real story driving the outlook for the King County real estate market.
- For-sale inventory in the county has dropped by around 20% over the last year or so. This trend has created a highly competitive real estate market where bidding wars are common.
- Population growth in the area is far outpacing construction. King County is processing about 200 new driver’s licenses per day, to people moving into the county from out of state. And that doesn’t even count people moving from within the state. By comparison, the county is only issuing building permits for 27 new housing units per day.
- The King County real estate outlook for 2017 is largely driven by this imbalance between supply and demand. There’s a high level of demand in the housing market, but not enough homes for sale to meet it. That’s why house prices in the area will likely continue rising for the foreseeable future.
- An increasing number of home buyers are now shopping for properties beyond the city center, and are willing to make longer commutes in exchange for more affordable housing. (For more on this, see our guide to the most affordable cities near Seattle.)
- Mr. Debord is part of a growing chorus of voices calling for increased home construction in the Seattle real estate market. But he feels it should be done strategically. “We can build our way out of this problem,” he said. “We can also do it intelligently, by preserving legacy neighborhoods and increasing density in urban centers near transit hubs. Change is inevitable.”
Slower Price Growth Despite High Competition
The King County real estate market is still hot, from a competition standpoint. But we could see much smaller price gains going forward. This is based on a recent forecast from the housing analysts at Zillow.
In March, the real estate data company predicted that home prices across the county would rise by 4.2% over the next 12 months, extending through March 2018. That’s a far cry from the 13.2% increase they reported over the last 12 months. This is a positive trend. Most economists and housing analysts agree that the Seattle (and broader King County) real estate market needs to cool down. Double-digit home price gains generally aren’t sustainable over the long term.
Disclaimer: This story contains forecasts and predictions for the King County, Washington housing market in 2017 through 2018. Data and projections were provided by third parties not associated with our company. We have compiled and presented this information as a service to our readers.